VTR plc results herald recovery

VTR plc has announced its interim results with a cautious belief that the post-production market is on the cusp of a recovery.

VTR plc has announced its interim results with a cautious belief that the post-production market is on the cusp of a recovery.

The six-company group has recorded an interim pre-tax profit of £400,000, more than seven times the figure for the corresponding period in 2003. Group turnover for the period was £12.7m.

'There has been some improvement in market conditions since last year, with more volume going through, although prices continue to be under some pressure? which we hope heralds a return to the levels we have achieved in the past,' said managing director John Banks. In 2001, VTR returned an annual profit of £2.76m, a figure that Banks thinks it will achieve again. 'We're expecting to hit £1.25m for the first half-year again within the next couple of years.'

The group's companies are performing well. The Machine Room recently won a £1m restoration project with the BBC and there are plans to expand its DVD operations. Blue continues to do well and came third in the Broadcast UK Post-Production Survey's producers' poll, while VTR has improved on last year and its D-Cinema has contributed to profits. The Hive and K Post have returned their best ever performances for the period, while Clipstream has just started development on subtitling software e-title, with EU funding to the tune of Eu1.35m (£910,000), and it has 'great potential', according to Banks.

Banks said: 'We believe that advertising and broadcast work, as well as other interests, are picking up and will continue to do so. The market is on the cusp and we want to be prudent, but we do believe it's getting better.'

Encouragingly, the group's gearing - the ratio of borrowing over net assets - has fallen steadily since last February's 126% to 104% but Banks wants to reduce it to about 76%. If VTR's level of gearing continues to drop, their optimism looks set to grow.